Ashish Bansal vs. Union Of INDIA

Held

The Court held that the applicant is not entitled to regular bail. The primary reason for this decision is that the investigation is still ongoing, a fact not disputed by the applicant's counsel. The Court noted that the applicant was served with a notice under Section 70 of the Act, and during the investigation, he was found involved in creating forged invoices and availing Input Tax Credits to the tune of Rs. 20,96,89,839/-. The Court emphasized that merely being in jail for a period of time (since February 7, 2023) is not a sufficient ground for granting bail, especially when the investigation is still in progress. The Court relied on the Supreme Court's observations in Nimmagadda Prasad vs. Central Bureau of Investigation, highlighting that economic offences constitute a class apart, have serious repercussions on the country's economy, and require a different approach in bail matters. The Court also distinguished the present case from the one relied upon by the applicant (M.Cr.C. No.8060/2022) by noting that in that case, the investigation was over at the time of bail consideration, unlike the present situation. Therefore, the application for regular bail was rejected.

Facts

The applicant, Ashish Bansal, is seeking regular bail under Section 439 of the CrPC. He has been in custody since February 7, 2023, in connection with a case registered by the Directorate General of Intelligence, GST, Raipur. The prosecution alleges that the applicant, as a common partner in three firms (M/s Five Star Trading Companies, M/s Bharma Sales, and M/s Pushpak Trading Co.), engaged in paper transactions, issuing invoices without actual supply of goods. This allegedly allowed him to avail Input Tax Credit (ITC) and defraud the government exchequer. The total alleged tax evasion is stated to be Rs. 6.75 Crore by the applicant's counsel, while the revenue claims a loss of Rs. 20,96,89,839/-. The investigation is ongoing, and the applicant has been in pre-trial detention for approximately ten months.

Key Issues

1. Whether the applicant is entitled to regular bail given the ongoing investigation and the nature of the alleged economic offence under Section 132(1)(b) & (c) of the Goods and Services Tax Act, 2017? Petitioner's Arguments: The applicant's counsel argued that the applicant is innocent, the investigation is complete, and the offence under the Act is compoundable. He stated that the applicant would deposit the ascertained tax amount and has already undergone about ten months of pre-trial detention. It was also contended that there is no direct material linking the applicant to the criminal case and no provision to club the income of different firms. Reliance was placed on a previous order of the High Court in M.Cr.C. No.8060/2022. Revenue's Arguments: The non-applicant (revenue) opposed the bail, stating that the applicant intentionally created three firms, engaged in no supply of goods, and availed ITC based on forged invoices, causing a loss of Rs. 20,96,89,839/-. The fraud is alleged to be PAN India level, and the investigation is still ongoing. The release of the applicant could hamper the investigation, lead to destruction of evidence, and influence witnesses. Reliance was placed on several High Court and Supreme Court decisions concerning economic offences and bail.